subject: The Non-Judicial Foreclosure Process in California [print this page] The Non-Judicial Foreclosure Process in California
If you want to better understand the California foreclosure timeline, you'll need divest yourself of some commonly held misconceptions. First and foremost, there is no rule that says that banks have to wait until you miss three payments before they can start proceedings. Technically, one missed payment puts you into default. Mortgage foreclosure proceeds very quickly once it starts. Many homeowners find themselves shocked by how quickly they can go from happy homeowners to people who are recovering their possessions from the sidewalk in front of their house.
The California foreclosure timeline starts with the bank filing a notice of default with the county recorder. They'll mail notice of the default to your address within 10 days of filing the notice with the county. Of course, this all sets a bureaucracy into action and, if you think getting them moving is hard, try getting them to stop. You'll receive more notices of default from the bank and likely quite a few irritated phone calls. This will go on for three months maximum before the bank sets a sale date for your home.
The mortgage foreclosure process speeds up from here on. The IRS will be notified of the sale. Remember that any amount you walk away from, according to the IRS, may be taxable income. The homeowner may be held liable for this.
The bank will sell the property through a trustee. The trustee sale will be filed with the county recorder within 14 days of the announcement of the sale. Up until this point, you still have a right to reinstate the loan, if you're able. The mortgage foreclosure process, however, will be well along its way at this point and it will likely be difficult to stop it.
Five days before the sale, you lose your right to reinstate the loan and are completely out of the deal. The California foreclosure timeline wraps up with the sale of your home or with it reverting to the ownership of the beneficiary. From this point on, you can count on ruined credit that may make it hard to even find an apartment, much less a house.
If you need short sale help, contact a realtor who specializes in putting these sales together. It may help you to avoid mortgage foreclosure altogether. There may be some considerations that you need to take into account with this option, as well.
If you have second mortgages or home equity lines of credit on your home, you may be held accountable to these beyond the value of the property. Fortunately, the banks only have the option of pursuing one type of mortgage foreclosure against you. If they opt for a non-judicial foreclosurethe most common typethey cannot change their minds and go after you for any additional outstanding debt later on. The best way to make sure that you get the best deal possible, however, is to talk to a professional. It takes experience to understand and work with banks.
